are we doing the right thing?

southernscouser

Before you accept;

Put all your current debts in to this calculator. It will tell you how much you pay in interest and how long it will take you to pay off depending on the monthly payment.

If it works out cheaper to get the unsecured loan then why not ask for it over a term where the monthly payments remain the same as what you are paying at the moment? The bank will try and convince you it's better to take a longer term because they make more money out of you that way. However they will say it will free up money for holidays etc! But remember, banks do not care about you. Do not trust them. They are there to make money out of you!

zipwen1

did the snowballer lol shouldnt laugh, it would take 77 months of £600 and we pay 12,741 interest so we would be better off taking out the loan which would take 61 months of £500 payment interest would be 8,194

ive just been off looking through our credit reports dont know why i bothered becouse we never miss payments, so im confused we both have brilliant reports on experian why are we being offered such a high rate 11% by our bank and why we are being refused loans by other companys? could it be due to us taking out a 120k mortgage just recently and haveing 25k unsecured debt?

southernscouser

And how many months would it take to pay of the loan if the monthly payment was £600? And how much would you save in interest? :think:

If you can afford the £600 a month now I really do urge you to keep paying that amount! I'm only talking through !!!!!! experience.


As for the credit report. It could be that your current borrowing commitments are too high for certain lenders.

zipwen1

will be paying 600 put 5 in by mistake it would be 53 months and interest would be 6,283

southernscouser

Also bear in mind the interest is likely to be front loaded. So for example if you borrowed £10k and after 2 payments you came into some money, even after 2 payments you might have only reduced your loan by £10! The rest would have been interest.

If your budget allows could you repay £700 a month? :think:

zipwen1

we would prob make a few over-payments per year as my bf can earn 400 to work a weekend so we would prob pay an extra grand a year off. we don't really want to stretch ourselves to far so we can still enjoy ourselves

southernscouser

Make sure you ask whether there are any penalties for making overpayments then.

Also which is likely, any early repayment fees.

zipwen1

will do cheers

bandraoi

Is it really worth going to the hassle of moving the money to a loan at 11%?

You will only be saving 4% on the interest rate, you will be tying yourself into a loan, and opening yourself up to the temptation with your newly cleared card balances. You could probably reduce the impact of the 4% difference with some careful budgeting.

If I were you, I'd spend six months "not enjoying" yourself and getting the debt down as much as possible. Maybe take a big long weekend away in the middle to keep you going. Then try to move the debt again. Chances are in six months someone will give you a much better life of balance transfer deal than 11%.

Seaxwyn

HI zipwen, I'd just liked to second what Southernscouser is saying, from my own bitter experience.

I've consolidated credit card debt and overdrafts onto lower interest loans several times, and all I achieved is to take the immediate pressure off so Ive ended up running up debts elsewhere again. After several years of doing that, and managing to turn 5k debt into 25k, I would really strongly advise anyone with lots of small debts to concentrate on paying them off as fast as possible rather than go the loan route.